"We promise to give an investment license to a
global company within 24 hours.” This bold promise was made at an unusual road
show was held across three cities in India earlier in December. The road show
was held by a country keen to attract investment from Indian companies. This
country is among the top ten fastest growing economies of the world and is on
track for achieving millennium development goals in health and education. The
country also boasts of being a gateway for a combined market of 400 million
consumers.

Roadshows are common in India, but this one was
by Ethiopia and highly unusual as African countries have rarely made such
promises to Indian companies. The apex chambers of commerce in India have
supported several initiatives to bring African markets closer to Indian Inc.
But this road show was perhaps the first of its kind driven by a single African
country.

India has been present in Ethiopia for years but needs to
increase its investment in the country. More than 600 Indian companies operate
in Ethiopia but now the country is demanding focused attention from specific
segments.

In many ways Ethiopia appears to be ahead of India is
providing an enabling environment for industry.

Apart from giving an investment license in 24 hours,
Ethiopian government is almost corruption free and offers single window
approvals.

A few Indian companies that already operate in Ethiopia
proudly proclaimed that it was easier to do deal with government
departments in Addis Ababa than in New Delhi.

This is borne out by the World Bank’s ease of doing
business report where Ethiopia ranks higher than India on some
parameters.

There are challenges of logistics and inadequate
infrastructure. But these are challenges that Indians can overcome faster than
other investors.

India and Ethiopia are only a single flight away. The
daily flights from Mumbai and New Delhi ensure that connectivity does not
pose a problem as it does for many other countries. There is a historical
connect too.

As Abyssinians, Ethiopians came to India’s western
region as early as 4th century.

From being slaves, they grew into much admired and
sought after warriors in regional kingdoms.

Soon they rose in the ranks to become chieftains and
even rulers of principalities in Gujarat and Maharashtra and merging with
local communities.

Many decades ago Indian teachers were sent to
Ethiopia by the government to teach in schools. Many generations of Ethiopians
have grown with deep regard and appreciation for India.

Unlike India and unlike the entire African
continent, Ethiopia was never colonized. It remained free of imperial powers.
But like India, it nurtures vibrant culture, cuisine and commerce. In these
times of globalisation, it is natural that these two emerging economies will
strengthen their trade and investment links.

In the case of refined petroleum, India
caters to only 1% of Ethiopia’s demand, and in the absence of supply woes,
policy hurdles and latent demand, our exports of this product can be raised by
over 95 times.

There was recently much talk about how
India missed out on strong wheat prices caused by crisis in Ukraine, drought in
some US wheat-producing regions, season delays in Canada (due to a
longer-than-normal cold season) and lower Australian produce due to the El
Nino. It could have been missing out on much action in Ethiopia too! India is a
country that already has excess of this crop in its coffers. India’s current
wheat crop, is currently being harvested, and expectations are that the total
output will reach the highest ever for a single season – 96 million tonne. Add
that to the 38 million tonne that is already stored away by the government, and
there is no reason to believe why exporters from India should miss the
opportunity of increasing their wheat supply to Ethiopia by anywhere up to 33
times. (At present, India caters to only under 3% of Ethiopia’s import demand
for the cereal crop.)

The world hasn’t missed a blink in
discussing how the great Indian auto road show is now losing steam. Especially
in the passenger cars and commercial vehicles categories. What are we blaming?
The EU crisis? Slowdown in the Americas? Elections in Australia? Stop blaming
the PIGS, and start counting how many buses and cars domestic and multinational
auto companies from India fell short of when it came to supplying automobiles.
In 2012, India supplied 1.44% of cars, 3.68% of buses, and a paltry 0.74% of
delivery trucks imported by Ethiopia. Is there scope to make more money from
exports to Ethiopia? [Are you waiting for an answer?]

Isn’t it surprising that India (which
has so many domestic cellphone producers) exports only 0.07% of telephones
imported by Ethiopia. With a strong manufacturing base, where it exports about
$1.5 billion worth of aircraft parts to the world, it doesn’t pay attention to
the $90 million plus demand in Ethiopia. Packaged and unpackaged medicaments
and medical instruments, large construction vehicles, stone processing
machines, and even gas turbines (of which India supplies nothing – some
opportunity there!) – count the products and their count keeps on rising, there
are reasons aplenty for Indian exporters to bet bigger on the Ethiopian market
in the days to come.

For exporters looking at longer term
and a bigger picture, investing in Ethiopia could also be an option. For
Ethiopia to be able to integrate and assimilate foreign investment into its
economy, the levels of technology and capital intensiveness should be
appropriate for a developing economy. India’s long experience in developing
appropriate technology and in the promotion of small industries could be used
by Ethiopia, keeping the above objective in mind. Opportunities for foreign
investment in Ethiopia abound in the areas of mineral extraction, agro based
industries and light manufacturing. Indian businesses can invest either
individually or as a consortium in areas like infrastructure development and
mineral extraction. Smaller units can be set up to tap opportunities in areas
like leather & leather manufactures and food processing.